First-Time Homebuyer?
Did You Know You Need Mortgage Life Insurance?
The experience of buying your first home can be a bit overwhelming. There are a lot of steps involved, papers to sign and finances to get in order. After your mortgage is approved, your responsibilities don’t end there.
A major consideration after you’ve been approved for your mortgage is choosing the right insurance.
As a first time homeowner, if your down payment is less than 20%, most lenders (the banks) require you to have some type of protection as they see you as a riskier investment.
The idea of having this insurance is financial protection in the event of sudden death. Your spouse or family may not be able to pay off your debts, and your mortgage is likely to be your largest debt. Having proper insurance means money is available to them when it’s needed most, which enables them to spend more time on helping each other cope, and spend less time on how to pay the bills.
The terminology of insurance types can be a bit confusing. You can get credit-life insurance through the bank, or you can get mortgage-life (or term life) insurance through an independent broker. We know… it’s tricky.
To sum each insurance type up: Mortgage-life insurance is purchased through an independent financial advisor and protects you and your family from financial debts in the event of death. Credit-life insurance is purchased through the banks, but only protects the banks if you suddenly pass away. As long as your mortgage-life coverage matches or exceeds your mortgage amount, it satisfies the bank’s rules often requiring you insure your mortgage.
Check Out Our Video On Tips For First-Time Home-Buyers
Before you accept the bank’s in-house insurance after approving your mortgage, you should know how they differ. It is very important.
Most personal finance agents and advisors will tell you that insurance through an independent broker is almost always a better deal than through the bank. Why? Good question.
A policy through independent mortgage-life insurance promises you several things a policy through the bank cannot. With credit life insurance:
- You own your policy.
- You name the beneficiary.
- Your beneficiary chooses where the money is spent
- Your coverage does not decrease over time.
- You can choose the length of the term.
- Your policy is transferable to another property if you decide to move.
- Underwriting occurs at the time of application, not at the time of the claim.
- Your policy continues even if you’ve paid off the mortgage.
As you can see, there are many reasons why mortgage-life insurance is superior to credit-life insurance from the bank. Since the law requires you to have insurance, you deserve a policy that lets you and your family call the shots. Your family will decide if the money pays off the mortgage, or goes towards other expenses such as funeral costs, living costs, loss of income, or paying off other higher interest debts. Call your local insurance advisor today for more information.
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Why Worb Financial?
Custom Solutions Tailored To Your Needs
We do not believe in a "one-size fits all" approach to Insurance, and will always bring you the best options for your unique situation... Even if this means recommending another provider.
Family Owned & Focused
We are a small team of dedicated professionals who treat each and every client like they are family. No matter what, we will help you understand your options and most importantly the importance of life insurance.
Canada-Wide Service
Licensed in Manitoba, Ontario, and British Columbia so we can serve you best no matter where you are.
LIFE INSURANCE
Life is unpredictable and amazing. We have the skills and knowledge to help you discover the best options and coverage.
EMPLOYEE BENEFITS
We’ll assess your companies needs and help you pick the right coverage to keep your staff happy.
FINANCIAL ADVICE
While you may have an idea of where you want to invest your money, it’s our job to know.
CRITICAL ILLNESS INSURANCE
Health risks are real, which means it’s important to be covered and prepared. While it’s not ideal to think about, it is important.
About Blair
Blair Worb
Blair Worb, Worb Financial’s CEO and owner, has been practicing life insurance for over 27 years and opened Worb Financial in 2000. Blair tenaciously seeks the best solutions and solves problems for his clients. He assists individuals, groups, and small businesses, providing employee benefits consulting for companies ranging in size from 3 - 100 employees.
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